<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION

                              WASHINGTON, DC 20549

                                    FORM 10-Q

    [ X ] Quarterly Report pursuant to Section 13 or 15(d) of the Securities
                              Exchange Act of 1934

                    For the quarter ended September 30, 1999

     [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
                              Exchange Act of 1934

                         For the transition period from


                         Commission File Number 0-26138

                          DENDRITE INTERNATIONAL, INC.
             (Exact name of registrant as specified in its Charter)


        New Jersey                                          22-2786386
 (State or other jurisdiction of                            (I.R.S. Employer
 incorporation or organization)                             Identification No.)



                            1200 Mount Kemble Avenue
                              Morristown, NJ 07960
                                  973-425-1200

                   (Address, including zip code, and telephone
                  number (including area code) of registrant's
                           principal executive office)


Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. [ X ]

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the last practicable date.

             Class          Shares Outstanding at November 12,1999
                        Common Stock          39,143,667

<PAGE>   2
                          DENDRITE INTERNATIONAL, INC.
                                      INDEX

<TABLE>
<CAPTION>
                                                                                           PAGE NO

<S>                                                                                        <C>
PART I        FINANCIAL INFORMATION                                                             3

ITEM 1.       Financial Statements (Unaudited)                                                  3

     Consolidated Statements of Operations
       Three months and nine months ended Sept 30, 1999 and 1998                                3

     Consolidated Balance Sheets
       Sept 30, 1999 and December 31, 1998                                                      4

     Consolidated Statements of Cash Flows
       Nine months ended Sept 30, 1999 and 1998                                                 5

     Notes to Consolidated Financial Statements                                                 6

ITEM 2.       Management's Discussion and Analysis of Financial Condition
              and Results of Operations                                                         7

ITEM 3.       Quantitative and Qualitative Disclosures About Market Risk                       15

PART II       OTHER INFORMATION                                                                16

ITEM 2.       Changes in Securities and Use of Proceeds                                        16

ITEM 5.       Other Information                                                                17

ITEM 6.       Report on Form 8-K                                                               17

Signatures                                                                                     18

</TABLE>

                                       2

<PAGE>   3
PART I       FINANCIAL INFORMATION

ITEM 1.       Financial Statements

                          DENDRITE INTERNATIONAL, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (IN THOUSANDS EXCEPT PER SHARE DATA)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                        Three Months Ended                         Nine Months Ended
                                                           September 30,                             September 30,
                                           ------------------------------------------    -----------------------------------------
                                                         1999                   1998                   1999                  1998
                                           -------------------    -------------------    -------------------    -------------------

<S>                                                   <C>                    <C>                    <C>                    <C>
Revenues:
   License fees                                       $ 6,891                $ 1,621                $17,692                $9,629
   Services                                            38,855                 33,314                107,539                84,808
                                           -------------------    -------------------    -------------------    ------------------
                                                       45,746                 34,935                125,231                94,437
                                           -------------------    -------------------    -------------------    ------------------

Cost of revenues:
   Cost of license fees                                   535                    379                  1,525                 1,764
   Cost of services                                    18,847                 16,248                 53,072                43,269
                                           -------------------    -------------------    -------------------    ------------------
                                                       19,382                 16,627                 54,597                45,033
                                           -------------------    -------------------    -------------------    ------------------

      Gross margin                                     26,364                 18,308                 70,634                49,404
                                           -------------------    -------------------    -------------------    ------------------

Operating expenses:
   Selling, general and administrative                 14,716                 11,254                 41,740                31,454
   Research and development                             2,393                  1,059                  5,866                 3,264
   Write-off of in-process Research
        And Development                                    -                   1,230                     -                  1,230
   Mergers and acquisitions                                -                      -                   3,466                    -
                                           -------------------    -------------------    -------------------    ------------------
                                                       17,109                 13,543                 51,072                35,948
                                           -------------------    -------------------    -------------------    ------------------

      Operating income                                  9,255                  4,765                 19,562                13,456
Interest income                                           408                    283                  1,266                   694
Other income (expense)                                    (10)                   120                    (92)                 (254)
                                           -------------------    -------------------    -------------------    ------------------
      Income before income taxes                        9,653                  5,168                 20,736                13,896
Income taxes                                            3,475                  2,320                  8,333                 5,677
                                           -------------------    -------------------    ------------------    -------------------

Net income                                             $6,178                 $2,848                $12,403                $8,219
                                           ===================    ===================    ===================    ==================

Net income per share:
   Basic                                                 $.16                   $.08                   $.33                  $.23
                                           ===================    ===================     ==================   ===================

   Diluted                                               $.15                   $.07                   $.31                  $.21
                                           ===================    ===================    ===================    ==================

Shares used in computing net income
per share:
   Basic                                               38,025                 36,265                 37,532                35,931
                                           ===================   ===================    ===================    ==================
   Diluted                                             41,012                 39,702                 40,269                38,983
                                           ===================    ===================    ===================    ==================
</TABLE>

The accompanying notes are an integral part of these statements.

                                       3

<PAGE>   4
                          DENDRITE INTERNATIONAL, INC.
                           CONSOLIDATED BALANCE SHEETS
                        (IN THOUSANDS EXCEPT SHARE DATA)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                   September 30,     December 31,
                                                                                    1999                  1998
                                                                                --------------        --------------

<S>                                                                                  <C>                    <C>
Assets
Current Assets:
    Cash and cash equivalents                                                         $37,664               $32,555
    Short-term investments                                                             15,056                 9,614
    Accounts receivable, net                                                           30,688                20,378
    Prepaid expenses and other                                                          2,886                 3,391
    Prepaid taxes                                                                       2,462                   921
    Deferred tax asset                                                                    675                   675
                                                                                --------------        --------------
        Total current assets                                                           89,431                67,534

Property and equipment, net                                                             9,553                 7,221
Deferred taxes                                                                          1,077                 1,077
Goodwill, net                                                                           9,893                 2,496
Purchased capitalized software, net                                                     2,695                 1,099
Capitalized software development costs, net                                             3,452                 2,404
                                                                                --------------        --------------

                                                                                     $116,101               $81,831
                                                                                ==============        ==============

Liabilities and Stockholders' Equity
Current Liabilities:
    Accounts payable                                                                  $ 3,212               $ 2,249
    Income taxes payable                                                                1,868                 1,036
    Accrued compensation and benefits                                                   6,144                 4,321
    Other accrued expenses                                                              9,406                 7,493
    Deferred revenues                                                                   1,227                 1,827
                                                                                --------------
                                                                                                      --------------
        Total current liabilities                                                      21,857                16,926
                                                                                --------------        --------------

Deferred rent                                                                             200                   392
Capital lease obligation                                                                  232                   544
Deferred taxes                                                                          3,717                 2,920

Stockholders' Equity
    Preferred Stock, no par value, 10,000,000 shares
        authorized, none issued                                                            --                    --
    Common Stock, no par value, 150,000,000 shares
        authorized, 39,589,032 and 37,245,675 shares issued as of
         September 30, 1999 and December 31, 1998, respectively
        and 38,987,532 and 36,644,175 outstanding as of
         September 30, 1999 and December 31, 1998, respectively                        58,037                41,442
    Retained earnings                                                                  36,400                23,998
    Deferred compensation                                                              (1,378)               (1,970)
    Accumulated other comprehensive income                                             (1,037)                 (494)
    Less treasury stock, at cost                                                       (1,927)               (1,927)
                                                                                --------------        --------------

       Total stockholders' equity                                                      90,095                61,049
                                                                                --------------        --------------

                                                                                     $116,101               $81,831
                                                                                ==============        ==============
</TABLE>

The accompanying notes are an integral part of these statements.

                                       4

<PAGE>   5
                          DENDRITE INTERNATIONAL, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                        Nine Months Ended September 30
                                                                                        -------------------------------
                                                                                           1999               1998
                                                                                           ----              -----
<S>                                                                                        <C>               <C>
Operating activities:
   Net income                                                                              $ 12,402            $ 8,219
   Adjustments to reconcile net income to net cash
      provided by operating activities:
        Depreciation and amortization                                                         4,009              2,464
        Compensation expense                                                                    663                226
        Tax benefit from employee stock plan                                                  5,869                --
        Write-off in-process research and development                                           --                1,230
        Changes in assets and liabilities:
           (Increase)/decrease in accounts receivable                                        (7,998)            (4,948)
           (Increase)/decrease in prepaid expenses and other                                    681               (543)
           (Increase)/decrease in prepaid income taxes                                       (1,426)                --
           Increase/(decrease) in accounts payable and accrued expenses                       3,614              4,032
           Increase/(decrease) in deferred rent                                                (192)              (142)
           Increase/(decrease) in income taxes payable                                          535                816
           Increase/(decrease) in deferred revenues                                            (725)               498
                                                                                        ------------       ------------

              Net cash provided by operating activities                                      17,432             11,852
                                                                                        ------------       ------------

Investing activities:
    Purchases of short-term investments                                                     (24,916)            (3,942)
    Sales of short-term investments                                                          19,474              5,513
    Purchase of MMI, net of cash acquired                                                    (6,640)              --
    Purchase of ABC and ADEM, net of cash acquired                                              --              (2,295)
    Purchases of property and equipment                                                      (4,513)            (1,752)
    Additions to capitalized software development costs                                      (1,835)            (1,067)
                                                                                        ------------       ------------

              Net cash used in investing activities                                         (18,430)            (3,543)
                                                                                        ------------       ------------

Financing activities:
    Net proceeds from borrowings                                                                --                (930)
    Payments on capital lease obligations                                                      (772)              (159)
    Issuance of Common Stock                                                                  7,220              2,594
                                                                                        ------------       ------------

              Net cash provided by financing activities                                       6,448              1,505
                                                                                        ------------       ------------

Effect of foreign exchange rate changes on cash                                                (341)              --

Net increase/(decrease) in cash and cash equivalents                                          5,109              9,814
Cash and cash equivalents, beginning of period                                               32,555             15,937
                                                                                        ------------       ------------

Cash and cash equivalents, end of period                                                    $37,664           $ 25,751
                                                                                        ============       ============
</TABLE>

The accompanying notes are an integral part of these statements.

                                       5

<PAGE>   6
                          DENDRITE INTERNATIONAL, INC.
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


1. Basis of Presentation

  The consolidated financial statements of Dendrite International, Inc. and its
subsidiaries included in this Form 10-Q are unaudited and reflect all
adjustments (consisting only of normal recurring adjustments) which are, in the
opinion of management, necessary for a fair presentation of the financial
position and operating results for the three and nine month periods ended
September 30, 1999. For further information, refer to the consolidated financial
statements and notes thereto, included in the company's current report on item 5
of Form 10-Q filed on August 16, 1999 and the Annual Report on Form 10-K for the
year ended December 31, 1998.

  Our interim operating results may not be indicative of operating results for
the full year.

2. Net Income Per Share

  We have presented net income per share pursuant to Statement of Financial
Accounting Standards (SFAS) No. 128, "Earnings Per Share," and the Securities
and Exchange Commission Staff Accounting Bulletin No. 98.

  Basic income per share ("Basic EPS") was computed by dividing the net income
for each period by the weighted average number of shares of common stock
outstanding for each period. Diluted income per share ("Diluted EPS") was
computed by dividing net income for each period by the weighted average number
of shares of common stock and common stock equivalents outstanding during each
period. For the three months ended September 30, 1999 and 1998, common stock
equivalents used in computing Diluted EPS were 2,987,000 and 3,437,000,
respectively. For the nine months ended September 30, 1999 and 1998, common
stock equivalents used in computing Diluted EPS were 2,737,000 and 3,052,000,
respectively.


3. Comprehensive Income

  For the three and nine months ended September 30, 1999 and 1998, we engaged
in numerous transactions involving foreign currency, which resulted in
unrealized gains and losses. Total after-tax comprehensive income for the three
months ended September 30, 1999 and 1998 was $6,583,000 and $3,041,000,
respectively. Total after-tax comprehensive income for the nine months ended
September 30, 1999 and 1998 was $11,847,000 and $8,172,000, respectively.

4. Merger with CorNet International, Ltd.

  On May 26, 1999, the Company acquired CorNet International, Ltd., ("CorNet")
in a transaction accounted for as a pooling of interests. The Company exchanged
1,480,538 of its shares for all outstanding shares of CorNet's common stock. All
prior historical consolidated financial statements contained herein have been
restated to include the financial positions, results of operations and cash
flows of CorNet.

5. Marketing Management International, Inc. Acquisition

  On June 30, 1999, the Company purchased all of the assets and assumed certain
liabilities of Marketing Management International, Inc. ("MMI") and certain
affiliated companies, for approximately $7,300,000 in cash, which includes
estimated transaction costs, and $3,400,000 in stock. The acquisition has been
accounted for using the purchase method with the purchase price allocated to the
fair value of the acquired assets and liabilities. The excess purchase price
over the fair value of the net assets acquired was allocated between capitalized
software development costs and goodwill based upon an independent appraisal.

6. Changes in Securities

  On Sept 14, 1999 the Company's board of directors declared a three for two
common stock split. The stock split was distributed in the form of a 100% stock
dividend to stockholders of record as of September 23, 1999. The dividend was
paid on October 7, 1999. Share and per share information included in the
accompanying consolidated financial statements have been restated to reflect the
stock split.

                                       6

<PAGE>   7
7. Recently Issued Accounting Pronouncements

  In December 1998, the Accounting Standards Executive Committee (AcSEC) of
the AICPA issued SOP 98-9, "Modification of SOP 97-2, Software Revenue
Recognition, With Respect to Certain Transactions", which address software
revenue recognition as it applies to multiple element arrangements when one or
more of the elements has not been delivered. Management does not believe the
adoption of SOP 98-9 will have a material effect on the Company's consolidated
financial position or results of operations. SOP 98-9 will be effective for all
transactions entered into on or after January 1, 2000.


ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
       of Operations.

FORWARD-LOOKING STATEMENTS

  This Form 10-Q contains certain forward-looking statements that we believe are
within the meaning of Section 27A of the Securities Act of 1933 and Section 21-E
of the Securities Exchange Act of 1934, which are intended to be covered by the
safe harbors created by such acts. For this purpose, any statements that are not
statements of historical fact may be deemed to be forward-looking statements.
Those statements in this Form 10-Q containing the words "believes",
"anticipates", "plans", "expects" and similar expressions constitute
forward-looking statements, although not all forward-looking statements contain
such identifying words. These forward-looking statements are based on our
current expectations, assumptions, estimates and projections about our company
and the pharmaceutical and consumer packaged goods industries. All
forward-looking statements involve risks and uncertainties, including those
risks identified under "Factors That May Affect Future Operating Results", many
of which are beyond our control. Although we believe that the assumptions
underlying our forward-looking statements are reasonable, any of the assumptions
could be inaccurate and actual results may differ from those indicated by the
forward-looking statements included in this Form 10-Q, as more fully described
under "Factors That May Affect Future Operating Results". In light of the
significant uncertainties inherent in the forward-looking statements included in
this Form 10-Q, you should not consider the inclusion of such information as a
representation by us or anyone else that we will achieve our objectives and
plans. Moreover, we assume no obligation to update these forward-looking
statements to reflect actual results, changes in assumptions or changes in other
factors affecting such forward-looking statements.

OVERVIEW

  We succeeded in 1991 to a business co-founded in 1986 by John Bailye, our
current President and Chief Executive Officer. The business was established to
provide sales force software products and support services that would enable
companies to manage, coordinate and control the activities of large sales forces
in complex selling environments, primarily in the prescription-only
pharmaceutical industry. Today, our solutions combine advanced software products
with a wide range of specialized support services. These services include
software implementation, technical and hardware support and sales force support.
We develop, implement and service sales force software products worldwide
through our own sales, support and technical personnel located in 17 offices as
well as through agents in certain countries where we do not have offices.

  We generate revenues from two sources: support services and license fees.
Support services, which account for a substantial majority of our revenues,
consist of fees from a wide variety of contracted services, which we make
available to our customers, generally under multi-year contracts. We generate
implementation fees from services provided to customize, configure and implement
sales force software products for our customers. We receive technical and
hardware support fees for services related to, among other things, the operation
of our customers' server computers, maintenance of our customers' databases,
asset control and maintenance for our customers' remote hardware and ongoing
technical support. Service revenues also include fees for software maintenance
services such as software defect resolution, performance enhancements and, in
some cases, product upgrades. We charge fees for these maintenance services
based on a percentage of applicable license fees, plus any customization fees.
We receive sales force support fees for organizing and managing support of our
customers' sales force, including training, telephone support and data analysis
services. Ongoing support fees are generally negotiated at the commencement of a
contract. However, it is our experience that our larger customers increase the
amount of services they purchase from us over time. Fees for these additional
services are typically based on the labor and materials used to provide the
applicable service.

  We charge our customers license fees to use our proprietary computer software.
Customers generally pay one-time perpetual license fees based upon the number of
users, the territory covered and the particular software product licensed by the
customer.

                                       7

<PAGE>   8
  License revenue is recognized under SOP 97-2 (see notes to the Financial
Statements No. 7). When the Company enters into a license agreement with a
customer requiring significant customization of its software products, the
Company recognizes revenues related to the license agreement using contract
accounting. Historically, most of our customers have requested significant
software customization. Management believes that with our newer generation of
products some customers will not require customization and therefore we may be
able to recognize revenues when persuasive evidence of an arrangement exists,
delivery has occurred, the fee is fixed and determinable and collectibility is
probable.

  We recognize additional license fees when some customers agree to license
additional products or functionality, acquire an upgraded version of Dendrite's
software and/or when the maximum permitted number of users or initial geographic
coverage is exceeded.

  The United States, the United Kingdom, France and Japan are our main markets.
We generated approximately 21% and 19% of our total revenues outside the United
States during the three months ended September 30, 1999 and 1998, respectively,
and approximately 24% and 23% during the nine months ended September 30, 1999
and 1998, respectively. The Company expects international revenues will continue
to account for a substantial portion of total revenues in the future.

  We bill services provided by our foreign branches and subsidiaries in local
currency. License fees for our products are generally billed in U.S. dollars
regardless of where they originate. Operating results generated in local
currencies are translated into U.S. dollars at the average exchange rate in
effect for the reporting period.


RESULTS OF OPERATIONS

THREE MONTHS ENDED SEPTEMBER 30, 1999 and 1998

  REVENUES. Total revenues increased $10.811 million to $45.746 million in the
three months ended September 30 1999, up 31% from $34.935 million in the three
months ended September 30, 1998.

  License fee revenues increased $5.270 million to $6.891 million in the three
months ended September 30, 1999 up 325% from $1.621 million in the three months
ended September 30, 1998. License fee revenues as a percentage of total revenues
were 15% in the three months ended September 30, 1999 as compared to 5% in the
three months ended September 30, 1998. Sales to new pharmaceutical customers,
sales force expansions and software upgrades by existing pharmaceutical
customers drove the increase in license fee revenues across all regions. The
level of license fee revenues in the third quarter of 1998 was unusual because
a major client contract expected to be awarded in the third quarter was actually
award in the second quarter and usually high service revenues recognized from
multiple significant client rollouts.

  Service revenues increased $5.541 million to $38.855 million in the three
months ended September 30, 1999 up 17% from $33.314 million in the three months
ended September 30, 1998. Service revenues as a percentage of total revenues
were 85% in the three months ended September 30, 1999 as compared to 95% in the
three months ended September 30, 1998. The increase in the absolute dollar
amount of service revenues was primarily the result of an increase in the number
of installed users of Dendrite sales force software products at both new and
existing customers, as well as the provision of additional services for our
existing customers. The decrease on a percentage basis reflects the unusually
high volume of services performed in the third quarter of 1998 and unusually low
volumes of licenses during the same period. The Company expects the approximate
current relationship of license to service revenues to continue in the future.

  COST OF REVENUES. Cost of revenues increased $2.755 million to $19.382 million
in the three months ended September 30, 1999 up 17% from $16.627 million in the
three months ended September 30, 1998.

  Cost of license fees increased $.156 million to $.535 million in the three
months ended September 30, 1999 up 41% from $.379 million in the three months
ended September 30, 1998. Cost of license fees in the three months ended
September 30, 1999 represents the amortization of capitalized software
development costs of $.463 million and third party vendor license fees of $.072
million. Cost of license fees in the three months ended September 30, 1998
represents the amortization of capitalized software development costs of $.332
million and third party license fees of $.047 million.

  Cost of services increased $2.599 million to $18.847 million in the three
months ended September 30, 1999 up 16% from $16.248 million in the three months
ended September 30, 1998. The absolute dollar amount increase in cost of
services was primarily due to an increase in staff required to support higher
client activity. As a percentage of service revenues, cost of services remained
constant at 49% during both the three months ended September 30, 1999 and 1998.

  The Gross Margin for the three months ended September 30, 1999 was 58%, which
is at the low end of the Company's annual targeted Gross Margin. The Company
believes that the appropriate targeted gross margins should be between 58%-60%.

                                       8

<PAGE>   9
  SELLING, GENERAL AND ADMINISTRATIVE (SG&A) EXPENSES. SG&A expenses increased
$3.462 million to $14.716 million in the three months ended September 30, 1999
up 31% from $ 11.254 million in the three months ended September 30, 1998. As a
percentage of revenue, SG&A expenses were constant at 32% during both the three
months ended September 30, 1999 and 1998. The increase in the absolute dollar
amount of SG&A expenses was primarily attributable to an increase in sales and
marketing expenses from both our existing businesses and newly acquired
businesses, as well as increases related to additional leased facilities in
Morristown, New Jersey. The Company's annual targeted SG&A expenses, as a
percentage of total revenues, are 30-32%. The Company is currently within these
targets and expects to remain there.

  RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses increased
$1.334 million to $2.393 million in the three months ended September 30, 1999 up
126% from $1.059 in the three months ended September 30, 1998. As a percentage
of revenues, research and development expenses increased to 5% in the three
months ended September 30, 1999 up from 3% in the three months ended September
30, 1998. The increase in research and development expenses during the most
recent period was primarily attributable to increased spending on continued
development of our laptop pharmaceutical sales force software product. The
Company's annual targeted research and development expenses, as a percentage of
total revenues, are 4-6%. The Company is currently in the middle range of these
targets and expects to remain there.


  WRITE-OFF OF IN-PROCESS RESEARCH AND DEVELOPMENT. On July 24, 1998, the
company acquired 100% of the capital stock of Associated Business Computing,
N.V. and an affiliated company (collectively, "ABC"). The company assigned
$1,230,000 to in-process research and development and such amount was
written-off in the accompanying statement of operations for the three months
ended September 30, 1998.

  PROVISION FOR INCOME TAXES. The effective tax rate for the three months ended
September 30, 1999 was 36% compared to 45% for the same period of 1998. The
reduction is due to the non-deductible nature of the write-off of in-process
research and development, which took place in the third quarter 1998, as well as
better tax planning strategies in 1999.

NINE MONTHS ENDED SEPTEMBER 30, 1999 and 1998

  REVENUES. Total revenues increased $30.794 million to $125.231 million in the
nine months ended September 30, 1999 up 33% from $94.437 million in the nine
months ended September 30, 1998.

  License fee revenues increased $8.063 million to $17.692 million in the nine
months ended September 30, 1999 up 84% from $9.629 million in the nine months
ended September 30, 1998. License fee revenues as a percentage of total revenues
were 14% in the nine months ended September 30, 1999 as compared to 10% in the
nine months ended September 30, 1998. The increase in license fee revenues
spanned all geographies and was primarily driven by pharmaceutical customers.

  Service revenues increased $22.731 million to $107.539 million in the nine
months ended September 30, 1999 up 27% from $84.808 million in the nine months
ended September 30, 1998. Service revenues as a percentage of total revenues
were 86% in the nine months ended September 30, 1999 as compared to 90% in the
nine months ended September 30, 1998. The increase in the absolute dollar amount
of service revenues was primarily the result of the addition of several new
customers, rapid acceptance of the Company's new software products, as well as
the provision of additional services to our existing customers.

  COST OF REVENUES. Cost of revenues increased $9.564 million to $54.597 million
in the nine months ended September 30, 1999 up 21% from $45.033 million in the
nine months ended September 30, 1998.

  Cost of license fees decreased $.239 million to $1.525 million in the nine
months ended September 30, 1999 down 14% from $1.764 million in the nine months
ended September 30, 1998. The decrease is attributable to a decline of third
party license fees of $.448 million partially offset by the increased
amortization of capitalized software of $.195 million. Cost of license fees in
the nine months ended September 30, 1999 represents the amortization of
capitalized software development costs of $1.191 million and third party vendor
license fees of $.334 million. Cost of license fees in the nine months ended
September 30, 1998 represents the amortization of capitalized software
development costs of $.996 million and third party license fees of $.768
million.

Cost of services increased $9.803 million to $53.072 million in the nine months
ended September 30, 1999 up 23% from $43.269 million in the nine months ended
September 30, 1998. The absolute dollar amount increase in cost of services was
primarily due to an increase in staff required to support higher client
activity. As a percentage of service revenues, however, cost of services
decreased to 49% in the nine months ended September 30, 1999 down from 51% in
the nine months ended September 30, 1998. This decrease was primarily the result
of increased operational efficiencies in 1999.

                                       9

<PAGE>   10
  SELLING, GENERAL AND ADMINISTRATIVE (SG&A) EXPENSES. SG&A expenses increased
$10.286 million to $41.740 million in the nine months ended September 30, 1999
up 33% from $31.454 million in the nine months ended September 30, 1998. This
increase was primarily attributable to an increased investment in sales and
marketing staff from both existing businesses and newly acquired businesses, as
well as increases related to additional leased facilities in Morristown, New
Jersey. As a percentage of revenue, SG&A expenses remained relatively constant
at 33%.

  RESEARCH AND DEVELOPMENT EXPENSES. Research and development expenses increased
$2.602 million to $5.866 million in the nine months ended September 30, 1999 up
80% from $3.264 million in the nine months ended September 30, 1998. As a
percentage of revenues, research and development expenses increased to 4.7% for
the nine months ended September 30, 1999 up from 3.5% for the nine months ended
September 30, 1998. The increase in research and development expenses during the
most recent period was attributable to increased spending on continued
development of our laptop pharmaceutical sales force software products and a new
version of our palmtop pharmaceutical sales force software product.

  WRITE-OFF OF IN-PROCESS RESEARCH AND DEVELOPMENT. On July 24, 1998, the
company acquired 100% of the capital stock of Associated Business Computing,
N.V. and an affiliated company (collectively, "ABC"). The company assigned
$1,230,000 to in-process research and development and such amount was
written-off in the accompanying statement of operations for the nine months
ended September 30, 1998.

  MERGERS AND ACQUISITIONS.  During the second quarter 1999, The Company took a
one time expense for the costs related to the acquisition of CorNet and the
cancellation of a proposed common stock offering.

  PROVISION FOR INCOME TAXES. The effective rate decreased to 40% in the nine
months ended September 30, 1999 from 41% in the nine months ended September 30,
1998. The effective rate for both the nine months ended September 30, 1999 and
1998 include one-time non-deductible charges for tax purposes. Excluding the
effect of tax charges, the effective rate decreased to 36% in the nine months
ended September 30, 1999 from 37% in the nine months ended September 30, 1998.
This decrease is the result of tax planning strategies.


LIQUIDITY AND CAPITAL RESOURCES

  We have historically financed our operations primarily through cash generated
by operations. Net cash provided by operating activities was $17.432 million for
the nine months ended September 30, 1999 compared to cash provided by operating
activities of $11.852 million for the nine months ended September 30, 1998. This
increase in cash provided by operating activities was due primarily to higher
net income and lower tax payments due to improved tax planning offset by
certain other operating activities.

  Cash used in investing activities was $18.430 million in the nine months ended
September 30, 1999 compared to cash used in investing activities of $3.543
million, in the nine months ended September 30, 1998. The increase was due
primarily to the purchases of additional short-term investments offset by the
purchase of MMI, as well as increased purchases of fixed assets.

  We obtained $6.448 million of cash from financing activities in the nine
months ended September 30, 1999 compared to $1.505 million of cash from
financing activities in the nine months ended September 30, 1998. The change in
our cash provided from financing activities was due to an increase in the
issuance of common stock primarily from the exercise of employee stock options,
during the nine months ended September 30, 1999.

  We maintain a $15.0 million revolving line of credit agreement with The Chase
Manhattan Bank. The agreement is available to finance working capital needs and
possible future acquisitions. The terms of this agreement require us to maintain
a minimum consolidated net worth, among other covenants, measured quarterly,
which is equal to our net worth as of December 31, 1997 plus 50% of net income
earned after March 31, 1998 plus 75 % of the net proceeds of any offerings of
new equity interests. This covenant effectively limits the amount of cash
dividends we may pay. At September 30, 1999, there were no borrowings
outstanding under the agreement and we satisfied all of our covenant
obligations.

  At September 30, 1999, our working capital was approximately $67.574 million.
We had no significant capital spending or purchasing commitments other than
normal purchase commitments and commitments under facility and capital leases.
We believe that available funds, anticipated cash flows from operations and our
line of credit will satisfy our projected working capital and capital
expenditure requirements, exclusive of cash required for possible acquisitions
of businesses, products and technologies, through at least the next two years.

                                       10

<PAGE>   11
  We regularly evaluate opportunities to acquire products or businesses
complementary to our operations. Such acquisition opportunities, if they arise,
and are successfully completed, may involve the use of cash or equity
instruments.


YEAR 2000 READINESS DISCLOSURE

  The efficient operation of our business is dependent in part on our internal
computer software and operating systems (collectively, our "Internal Programs
and Systems"). Since 1997, as part of our Year 2000 compliance plan, we have
been evaluating our Internal Programs and Systems to identify potential Year
2000 compliance problems. We have tested our Internal Programs and Systems to
verify Year 2000 compliance. As a result of the testing, we have determined that
some of our Internal Programs and Systems were not Year 2000 compliant.
Accordingly, we have modified or replaced these Internal Programs and Systems to
make them Year 2000 compliant. Although we believe our internal Year 2000
compliance program has been completed, we are actively monitoring our Internal
Program and Systems to determine whether any further modification or replacement
of these systems is necessary. We cannot assure that our efforts in this regard
have been or will be successful. We are also communicating with our suppliers
and others to coordinate Year 2000 conversion and are requesting assurances from
all software vendors from which we may purchase or license software that such
software will correctly process all date information at all times.

  To date, we have spent approximately $309,830 to evaluate, test and remediate,
if necessary, our Internal Programs and Systems for Year 2000 compliance
problems. These costs have been funded with cash from our operations. To date,
we have not spent any material amount on evaluating the Year 2000 compliance
status of our sales force software products licensed to customers. Although we
do not anticipate any future material expenditures, our customers may require us
to incur additional expenses associated with remediating their software
products. We expect that the expenses and capital expenditures associated with
achieving Year 2000 compliance will not have a material adverse effect on our
business, results of operations or financial condition.

  We believe that the sales force software products that we currently offer to
customers are Year 2000 compliant. We define "Year 2000 compliant" to mean that
the applicable Dendrite product is capable of recognizing and processing date
data beyond the Year 2000 as belonging to the correct century, so long as all
products (for example, hardware, firmware, and software including interfacing
programs, operating systems, and database engines) used with the software are
Year 2000 compliant and properly exchange date data with our products.

  Some of our older products will not, and some may not, accurately process
dates beyond December 31, 1999. To the extent any of these products are still in
use in 1999, we will continue to attempt to migrate our customers to products
which are Year 2000 compliant. We cannot assure you that this will occur. A
failure to migrate any such customer to a product which is Year 2000 compliant
could adversely affect our business, operating results or financial condition.
We may also experience increased expenses which we cannot recoup from current
customers in addressing their migration to software that is Year 2000 compliant.
We have strongly encouraged each customer to have its product tested by them for
Year 2000 compliance.

  As we continue to assess our state of readiness for January 1, 2000, we are
working to formulate a reasonably likely worst case scenario, and to prepare
contingency plans, as warranted. In this regard, we expect to spend up to an
additional $73,500 through the end of the year in order to purchase generators
to provide electrical power in the event of any interruption in the power supply
to our facilities throughout the world. For a discussion of the risks associated
with the Year 2000, please see the heading under "Factors that May Affect Future
Operating Results" entitled "We are exposed to risks associated with the Year
2000."

FACTORS THAT MAY AFFECT FUTURE OPERATING RESULTS

OUR BUSINESS IS HEAVILY DEPENDENT ON THE PHARMACEUTICAL INDUSTRY.

  Most of our sales force software products and support services are currently
used in connection with the marketing and sale of prescription-only drugs. This
market is undergoing a number of significant changes. These include:

      - consolidations and mergers which may reduce the number of existing and
        potential customers;

      - reclassification of formerly prescription-only drugs to permit their
        over-the-counter sale;

      - competitive pressures on our pharmaceutical customers resulting from the
        continuing shift to the delivery of healthcare through managed care
        organizations; and

                                       11

<PAGE>   12
      - changes in law, such as government mandated price reductions for
        prescription-only drugs, that affect the healthcare systems in the
        countries where our customers and potential customers are located.

  We cannot assure you that we can respond effectively to any or all of these
and other changes in the marketplace. Our failure to do so could have a material
adverse effect on our business, operating results or financial condition.

OUR QUARTERLY RESULTS OF OPERATIONS MAY FLUCTUATE SIGNIFICANTLY AND MAY NOT MEET
MARKET EXPECTATIONS.

  Our results of operations may vary from quarter to quarter due to lengthy
sales and implementation cycles for our products, our fixed expenses in relation
to our fluctuating revenues and variations in our customers' budget cycles, each
of which is discussed below. As a result, you should not rely on
quarter-to-quarter comparisons of our results of operations as an indication of
future performance. It is possible that in some future period our results of
operations may be below the expectations of the public market analysts and
investors. If this happens, the price of our common stock may decline.

      -  Our lengthy sales and implementation cycles make it difficult to
         predict our quarterly revenues. The selection of a sales force software
         product often entails an extended decision-making process because of
         the strategic implications and substantial costs associated with a
         customer's license of the software. Given the importance of the
         decision, senior levels of management often are involved and, in some
         instances, the board of directors may be involved in this process. As a
         result, the decision-making process for some of our larger customers
         can take from nine to twelve months, although in some cases it may take
         even longer. Accordingly, we cannot control or predict the timing of
         our execution of contracts with customers.

         In addition, for customers with large sales forces, an implementation
         process of three to nine months is customary before the software is
         rolled out to its sales force. However, if a customer were to delay or
         extend its implementation process, our quarterly revenue may decline
         below expected levels and could adversely affect our results of
         operations.

      -  Our fixed costs may lead to fluctuations in our quarterly operating
         results if results of revenue fall above or below expectations. We
         establish our expenditure levels for product development, sales and
         marketing and some of our other operating expenses based in large part
         on our expected future revenues and anticipated competitive conditions.
         In particular, we frequently add staff in advance of new business to
         permit adequate time for training. If the new business is subsequently
         delayed or canceled, we will have incurred expenses without the
         associated revenue. In addition, we may increase sales and marketing
         expenses if competitive pressures become greater than we currently
         anticipate. Since only a small portion of our expenses varies directly
         with our actual revenues, our operating results and profitability are
         likely to be adversely and disproportionately affected if our revenues
         fall below expectations.

      -  Our business is affected by variations in our customers' budget cycles.
         We have historically realized a greater percentage of our license fees
         and service revenues in the second half of the year than in the first
         half because, among other things, our customers typically spend more of
         their annual budget authorization for sales force software products and
         support services in the second half of the year. However, the
         relationship between the amounts spent in the first and second halves
         of a year may vary from year to year and from customer to customer. In
         addition, changes in our customers' budget authorizations may reduce
         the amount of revenues we receive from the license of additional
         software or the provision of additional services. As a result, our
         operating results could be adversely affected.

OUR REVENUES WOULD DECLINE AND OUR BUSINESS WOULD BE ADVERSELY AFFECTED BY THE
LOSS OF ONE OF OUR CUSTOMERS.

  We derive a significant portion of our revenues from a limited number of
customers (considering all affiliates of each customer as part of that
customer). Approximately 49%, 51% and 50% of our total revenues in 1998, 1997
and 1996, respectively, came from our top three customers, and the company
believes that the relationship will remain relatively consistent in the future.
We believe that the costs to our customers of switching to a competitor's
software product, or of taking significant system management functions in-house,
are substantial. Nevertheless, some of our customers have switched, and in the
future other customers may switch, to software products and/or services offered
by our competitors. If any of our major customers were to make such a change,
our business, operating results or financial condition would be materially and
adversely affected.

                                       12

<PAGE>   13
WE MAY BE UNABLE TO SUCCESSFULLY INTRODUCE NEW PRODUCTS OR RESPOND TO
TECHNOLOGICAL CHANGE.

  The market for sales force software products changes rapidly because of
frequent improvements in computer hardware and software technology. Our future
success will depend, in part, on our ability to:

   -  use available technologies and data sources to develop new products and
      services and to enhance our current products and services;

   -  introduce new solutions that keep pace with developments in our target
      markets; and

   -  address the changing and increasingly sophisticated needs of our
      customers.

  We cannot assure you that we will successfully develop and market new products
or product enhancements that respond to technological advances in the
marketplace, or that we will do so in a timely fashion. We also cannot assure
you that our products will adequately and competitively address the needs of the
changing marketplace.

  Competition for software products has been characterized by shortening product
cycles. We may be materially and adversely affected by this trend if the product
cycles for our products prove to be shorter than we anticipate. If that happens,
our business, operating results or financial condition could be adversely
affected.

  To remain competitive, we also may have to spend more of our revenues on
product research and development than we have in the past. As a result, our
results of operations could be materially and adversely affected.

  Further, our software products are technologically complex and may contain
previously undetected errors or failures. Such errors have occurred in the past
and we cannot assure you that, despite our testing, our new products will be
free from errors. Errors that result in losses or delays could have a material
adverse effect on our business, operating results or financial condition.


WE ARE EXPOSED TO RISKS ASSOCIATED WITH THE YEAR 2000-YEAR 2000 READINESS
DISCLOSURE.

   -  Demand for our software products and services may decline before and after
      the Year 2000. A substantial amount of demand for our software may come
      from customers in the process of replacing and upgrading software
      applications to accommodate the change in date to the year 2000. This
      demand contributed to our 1998 sales growth and as well as our 1999 sales
      growth. Once customers have completed these activities, we may experience
      a deceleration in revenue growth. In addition, the expense and time
      associated with remediation efforts by customers to address Year 2000
      compliance problems for software products other than ours may cause our
      customers to delay the purchase of, or reduce the amount they spend on,
      our products and services, both before and after January 1, 2000. Such
      reductions could have a material adverse effect on our business, operating
      results or financial condition.

   -  Our Year 2000 remediation efforts may not be successful. As part of our
      Year 2000 compliance plan, we have assessed the readiness of our Internal
      Programs and Systems. We believe our Internal Programs and Systems are
      substantially Year 2000 compliant. However, if additional defects,
      including defects in hardware, are identified and if the necessary
      modifications and conversions are not made, or are not completed in a
      timely manner, the Year 2000 problem could have a material adverse effect
      on our business, operating results or financial condition.

   -  We may incur material expenses in connection with any claim relating to
      Year 2000 compliance of our own products or products of third parties. We
      believe the sales force software products that we currently offer to our
      customers, prior to any customization, are Year 2000 compliant. We cannot
      assure you, however, that our current products do not contain undetected
      errors or defects associated with the Year 2000 date functionality that
      may result in material costs to us.

      Some of our older products will not, and some may not accurately process
      dates after December 31, 1999. To the extent any of these products are
      still in use in 1999, we will continue to attempt to migrate our customers
      to products that are Year 2000 compliant. We cannot assure you that this
      will occur. A failure to migrate any customer to a product that is Year
      2000 compliant could adversely affect our business, operating results or
      financial condition. We may also experience increased expenses which we
      cannot recoup from current customers in

                                       13

<PAGE>   14
      addressing their migration to software that is Year 2000 compliant. We may
      also incur additional expenses associated with remediating software
      products of our current customers.

      In addition, some of our customers may attempt to hold us responsible for
      Year 2000 compliance of hardware or software not supplied or created by
      us, but used in conjunction with one or more of our products. For example,
      our customers' computer hardware and software, with which our software
      must interface, may not properly handle date information after the Year
      2000 without error or interruption.

INCREASED COMPETITION MAY RESULT IN PRICE REDUCTIONS AND DECREASED DEMAND FOR
OUR PRODUCTS AND SERVICES.

  We believe there are approximately ten other companies that sell sales force
software products and specifically target the pharmaceutical industry,
including;

- four competitors that are actively selling sales force software products in
more than one country; and

- three competitors that also offer sales force support services.

  We believe that most of our competitors offer sales force software products
and/or services that do not address the variety of customer needs that our
solutions address. However, these competing solutions may cost less than our
solutions. We also face competition from many vendors that market and sell sales
force software products in the consumer packaged goods market. In addition, we
also compete with various companies that provide support services similar to our
services. We believe our ability to compete depends on many factors, some of
which are beyond our control, including:

- the number and success of new market entrants supplying competing sales force
products or support services;

- expansion of product lines by, or consolidation among, our existing
competitors; and

- development and/or operation of in-house sales force software products or
services by our customers and potential customers.

  Some of our competitors and potential competitors are part of large corporate
groups and have longer operating histories and significantly greater financial,
sales, marketing, technology and other resources than we have. We cannot assure
you that we will be able to compete successfully with these companies or that
competition will not have a material adverse effect on our business, operating
results or financial condition.

SOME OF OUR CUSTOMERS RELY ON OUR COMPETITORS FOR MARKET DATA.

  Current market data on the sales of prescription-only pharmaceutical products
is an important element for the operation of our sales force software products
in the prescription-only pharmaceutical industry. Our customers use this data to
guide and organize their sales forces and marketing efforts. Some of the leading
purveyors of this market information compete with us either directly or through
affiliates or may compete with us in the future. If these purveyors of market
information require pharmaceutical companies to use their sales force products
and/or services, our business, operating results and financial condition may be
materially and adversely affected.


OUR INTERNATIONAL OPERATIONS HAVE RISKS THAT OUR DOMESTIC OPERATIONS DO NOT.

  The sale of our products and services in foreign countries accounts for, and
is expected in the future to account for, a material part of our revenues. These
sales are subject to risks inherent in international business activities,
including:

- any adverse change in the political or economic environments in these
countries;

- economic instability;

- any adverse change in tax, tariff, trade or other regulations;

- the absence or significant lack of legal protection for
intellectual property rights;

- exposure to exchange rate risk for service revenues which are denominated in
currencies other than U.S. Dollars; and

- difficulties in managing an organization spread over various jurisdictions.

                                       14

<PAGE>   15
OUR SUCCESS DEPENDS ON RETAINING OUR KEY SENIOR MANAGEMENT TEAM AND ATTRACTING
AND RETAINING QUALIFIED PERSONNEL.

  Our future success depends, to a significant extent, upon the contributions of
our executive officers and key sales, technical and customer service personnel.
Our future success also depends on our continuing ability to attract and retain
highly qualified technical and managerial personnel. Competition for such
personnel is intense. We have at times experienced difficulties in recruiting
qualified personnel and we may experience such difficulties in the future. Any
such difficulties could adversely affect our business, operating results or
financial condition.

OUR INABILITY TO MANAGE OUR GROWTH COULD ADVERSELY AFFECT OUR BUSINESS.

  To manage our growth effectively, we must continue to strengthen our
operational, financial and management information systems and expand, train and
manage our work force. However, we may not be able to do so effectively or on a
timely basis. Failure to do so could have a material adverse effect upon our
business, operating results or financial condition.

  In addition, we have historically pursued and will continue to pursue
acquisitions of companies with complementary businesses or products. We also
have entered and will continue to enter into strategic joint ventures and
alliances. There can be no assurance, however, that we will be able to identify
attractive opportunities or enter into any such transactions in the future. In
addition, as to completed acquisitions, there can be no assurance that we will
be able to integrate successfully the acquired entity into our operations.

OUR BUSINESS DEPENDS ON PROPRIETARY TECHNOLOGY THAT WE MAY NOT BE ABLE TO
PROTECT COMPLETELY.

  We rely on a combination of trade secret, copyright and trademark laws,
non-disclosure and other contractual agreements and technical measures to
protect our proprietary technology. We cannot assure you that the steps we take
will prevent misappropriation of this technology. Further, protective actions we
have taken or will take in the future may not prevent competitors from
developing products with features similar to our products. In addition,
effective copyright and trade secret protection may be unavailable or limited in
certain foreign countries. We have, on occasion, entered into agreements which
require us to place our source code in escrow to secure our service and
maintenance obligations.

  Further, we believe that our products and trademarks do not infringe upon the
proprietary rights of third parties. However, third parties may assert
infringement claims against us in the future that may result in the imposition
of damages or injunctive relief against us. In addition, any such claims may
require us to enter into royalty arrangements. Any of these results could
materially and adversely affect our business, operating results or financial
condition.

UNIQUE CHARACTERISTICS OF THE CONSUMER PACKAGED GOODS MARKET.

  We market and sell sales force software products and support services to
companies in the consumer packaged goods market. The selling environment in this
market has unique characteristics that differentiate it from the pharmaceutical
market. In addition, we believe that the consumer packaged goods market is
composed of sub-markets, each of which has unique characteristics. Accordingly,
we cannot assure you that we will be able to replicate in this market the
success we have achieved in the ethical pharmaceutical market.


Item 3. Quantitative and Qualitative Disclosures About Market Risk.

FOREIGN CURRENCY RISK

  Because we have operations in a number of countries, we face exposure to
adverse movements in foreign currency exchange rates. As currency rates change,
translation of the income statements of our international entities from local
currencies to U.S. dollars affects year-over-year comparability of operating
results. We do not hedge translation risks because we generally reinvest the
cash flows from international operations in the country where they originate.

  Management estimates that a 10% change in foreign exchange rates would impact
reported operating profit by less than $500,000. This sensitivity analysis
disregards the possibility that rates can move in opposite directions and that
losses from one area may be offset by gains from another area.

                                       15

<PAGE>   16
  The introduction of the Euro as a common currency for members of the European
Monetary Union took place on January 1, 1999. We believe that this event has had
minimal impact on our foreign exchange exposure.

INTEREST RATE RISK

  Our exposure to market risk is related to changes in interest rates which
primarily applies to our investment portfolio. We invest in instruments that
meet high credit quality standards, as specified in our investment policy. The
policy also limits the amount of credit exposure to any one issue, issuer and
type of investment.

  As of September 30, 1999, our investments consisted primarily of commercial
paper maturing over the following four months. Due to the average maturity and
conservative nature of our investment portfolio, a sudden change in interest
rates would not have a material effect on the value of the portfolio. Management
estimates that had the average yield of our investments decreased by 100 basis
points, our interest income for the year ended December 31, 1998 would have
decreased by less than $150,000. This estimate assumes that the decrease
occurred on the first day of 1998 and reduced the yield of each investment
instrument by 100 basis points throughout the year. The impact on our future
interest income, of future changes in investment yields will depend largely on
the gross amount of our investments. See Item 2 - "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources."


PART II  OTHER INFORMATION


Item 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS.

  Changes in Securities

  On Sept 14, 1999 the Company's board of directors declared a three for two
common stock split. The stock split was distributed in the form of a 100% stock
dividend to stockholders of record as of September 23, 1999. The dividend was
paid on October 7, 1999. Share and per share information included in the
accompanying consolidated financial statements have been restated to reflect the
stock split.

  On June 30, 1999, the Company issued 105,660 shares of restricted Common Stock
to MMI Holdings, Inc. ("MMI Holdings") as partial consideration for the
Company's acquisition of substantially all of the assets of certain direct and
indirect subsidiaries of MMI Holdings (the "MMI Acquisition"). The Company did
not employ an underwriter in connection with the issuance or sale of the
securities described above. The Company claims that the issuance or sale of the
foregoing securities was exempt from registration under Section 4(2) of the
Securities Act of 1933, as amended (the "Act"), as transactions not involving
any public offering and such securities having been acquired for investment and
not with a view to distribution. Appropriate legends were affixed to the stock
certificates issued in the MMI Acquisition and MMI Holdings had adequate access
to information about the Company.

  On May 26, 1999, the Company issued 1,480,538 shares of restricted Common
Stock to the shareholders of CorNet International, Ltd. ("CorNet") in exchange
for all of the outstanding capital stock of CorNet in a merger transaction (the
"CorNet Merger"). The Company did not employ an underwriter in connection with
the issuance or sale of the securities described above. The Company claims that
the issuance or sale of the foregoing securities was exempt from registration
under Section 4(2) of the Act, as transactions not involving any public offering
and such securities having been acquired for investment and not with a view to
distribution. Appropriate legends were affixed to the stock certificates issued
in connection with the CorNet Merger and all recipients had adequate access to
information about the Company.

  On July 24, 1998, the Company issued 67,692 shares of restricted Common Stock
to the owners of Associated Business Computing N.V. and an associated company
(collectively, "ABC") as partial consideration for the Company's acquisition of
all of the outstanding capital stock of ABC (the "ABC Acquisition"). The Company
did not employ an underwriter in connection with the issuance or sale of the
securities described above. The Company claims that the issuance or sale of the
foregoing securities was exempt from registration under Section 4(2) of the Act,
as transactions not involving any public offering and such securities having
been acquired for investment and not with a view to distribution. Appropriate
legends were affixed to the stock certificates issued in connection with the ABC
Acquisition and all recipients had adequate access to information about the
Company.

                                       16

<PAGE>   17
Item 5.   Other Information

     (a) None


Item 6.   Report on Form 8-K

     (a) The Company did not file any Reports on Form 8-K during the quarter
for which this report is filed.

                                       17

<PAGE>   18
SIGNATURES


  Pursuant to the requirements of the Securities Exchange Act Of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


Date: November 15, 1999


                                By: /s/ John E. Bailye
                                ----------------------
                                    John E. Bailye, President and
                                    Chief Executive Officer


                                By: /s/ George T. Robson
                                ----------------------
                                    George T. Robson, Executive Vice President
                                    and Chief Financial Officer

                                       18